$533 mn misspent on Russia defence deals: Watchdog

Moscow: About 1,500 violations and infractions have been uncovered in Russia`s state defence spending in 2012 involving over RUB 16 billion (USD 533 million), the Russian Federal Defence Contracts Service (Rosoboronzakaz) said on Friday.

The service conducted 99 scheduled and 176 surprise checks and audits, finding 1,415 instances of the unlawful receipt and use of state funds, Rosoboronzakaz said in a report posted on its website.

Over RUB 2 billion was returned to the budget and over RUB 3.5 billion worth of damage was averted last year, the service said, adding that 572 administrative fines were imposed totalling RUB 15.59 million.

The amount of misused funds returned to the budget has doubled in the past three years, Rosoboronzakaz said.

The Chief Military Prosecutor`s Office said on Thursday an investigation was underway into the suspected embezzlement of RUB 7 million at a Defence Ministry owned health resort in south Russia`s Stavropol region. A number of top managers at the Slavyanka sanatorium, including its director Magomed Magomedov, are suspected of appropriating Defence Ministry`s funds by paying third parties for services which were not provided.

That is the latest in a string of scandals at the Defence Ministry recently involving suspected fraud. Several people employed by the Oboronservis defence property services company were arrested late last year on suspicion of fraud totalling over RUB 13 billion (USD 430 million) involving the illegal sale of ministry property.

Former defence minister Anatoly Serdyukov resigned over that scandal in November.